Assessing the Risks of Insuring Reputation Risk
Journal
The Journal of Risk and Insurance
ISSN
0022-4367
Type
journal article
Date Issued
2015
Author(s)
Abstract
Reputation risk is becoming increasingly important, especially with the
rapidly growing influence of social media, heightened scrutiny on reputation
risk by banking and insurance regulators, and reputation’s impact on
organizational value. Insurers have responded to this development only
recently by offering new reputation risk insurance solutions. The aim of this
article is to present the first detailed academic analysis of these new insurance
policies, including examination of the risks insurers face in offering such
coverage. We also offer a conceptualization of reputation risk in an insurance
and risk management context with focus on exposures, perils, and hazards.
Our analysis indicates that loss identification and measurement generate the
greatest challenges to insurers in providing reputation risk coverage. Lack of
experience as well as the complexity of the chain of reputation risk events
related to reputation insurance coverage present insurers with significant
challenges in making this a viable line of business.
rapidly growing influence of social media, heightened scrutiny on reputation
risk by banking and insurance regulators, and reputation’s impact on
organizational value. Insurers have responded to this development only
recently by offering new reputation risk insurance solutions. The aim of this
article is to present the first detailed academic analysis of these new insurance
policies, including examination of the risks insurers face in offering such
coverage. We also offer a conceptualization of reputation risk in an insurance
and risk management context with focus on exposures, perils, and hazards.
Our analysis indicates that loss identification and measurement generate the
greatest challenges to insurers in providing reputation risk coverage. Lack of
experience as well as the complexity of the chain of reputation risk events
related to reputation insurance coverage present insurers with significant
challenges in making this a viable line of business.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Blackwell Publishing
Volume
83
Number
3
Start page
641
End page
679
Pages
39
Subject(s)
Division(s)
Eprints ID
255442